Taylor likely will continue to operate FastForward because 19 per month is more

Taylor likely will continue to operate fastforward

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6For further comparison, Exhibit 2.18 shows the return on equity for differ-ent industries. FastForward’s return exceeds these.Three additional points are important. First,an evaluation of returns should recognize risk.Risk can differ considerably across investmentalternatives. Second, income can vary frommonth to month. Income variation is related torisk. Third, because of company, business, andeconomic fluctuations, a better measure of re-turn is obtained by computing it over a longerperiod such as one year.You Make the CallEngineerYou are considering launching a proprietorship tomanufacture custom-fit athletic shoes. Your current salary is $2,500per month. You estimate the new business will yield a net income of$4,500 per month and require an average equity balance of $400,000.Do you pursue this opportunity? Chapter 2 Financial Statements and Business Transactions 57 SummaryIdentify and explain the content and reporting aims offinancial statements. Describe differences in financial statements acrossforms of business organization. .

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